Local manufacturers better prepared for tough times

The last General Motors plant in Windsor was shut down eight years ago, but local automakers will not be fully bothered by the biggest US automaker announcing the closure of its plant on Monday. Oshawa and four others in the United States.

The company will also close two other plants abroad by the end of 2019 by making a series of reductions, including a 15% reduction in salaried staff, bringing the total number of casualties by 20%. GM jobs at nearly 15,000.

I think most suppliers were waiting for that

"I think it will have a training effect not only locally, but throughout Ontario," said Tim Galbraith, sales director for Cavalier Tool and Manufacturing.

"Many local businesses are part of GM's supply chain in Oshawa. It's painful, but it's not really surprising.

GM also announced Monday the closure of its badembly plants in Lordstown (Warren, Ohio) and Detroit-Hamtramck. The builder will also close two transmission plants in White Marsh (Maryland) and Warren (Michigan).

All affected mills are victims of the rapid shift in consumer demand from cars to trucks to SUVs.

In a press release, the company said that plant cuts and closures would release $ 6 billion in cash a year to reinvest in its transformation into electric and autonomous vehicles.

Galbraith stated that Cavalier does not directly supply GM, but manufactures tools and molds for customers who manufacture parts that are shipped to Oshawa.

"This is going to have obvious consequences for us," said Galbraith, who added that Cavalier was isolated from the ups and downs of the industry by limiting the automotive sector's business to one-third of the total volume from the company.

David Palmer, Build-A-Mold's Sales Manager, said it would take 12 to 18 months for the announcement of Monday's announcement to impact the industry.

Palmer agrees that zone manufacturers will feel some effects, but nothing compared to the slowdown of 2008-09. This near-death experience for local manufacturers has prepared them better for the tough times.

"It's not as if GM has announced its closure, but rather its restructuring to ensure the future product line," Palmer said.

"They invest in research and development and I think they will need tools and molds to make new vehicles. It's like what happened when we came out of the 2009 economic downturn, as automakers invested in tools and molds to make new products. "

Gene Schilling, director of business development for Reko International Group, called the day a disappointing one for the Canadian manufacturing sector. He said that with the just-in-time delivery system of the industry, the impact of the closure was increasing as we were getting closer to Oshawa.

"Oshawa will have more impact than Windsor," Schilling said.

"Windsor companies also supply a variety of plants. Many of us are level II suppliers, so we do not provide directly to GM.

"The majority of Reko's business is in the US We will be affected, but it will not be too bad."

Monday's announcement has once again called for a national auto strategy and the need to address the corporate tax rate.

"It's important that we learn here and that we have a national auto strategy; what we (the industry) have been wanting for years, "said Galbraith." Without a coordinated plan, we will not be competitive with other countries and the southern United States.

"When you lose an badembly plant, the feed mills go with it."

Jonathon Azzopardi, president of the Canadian Mussel Manufacturers' Association and Laval Tool, urged the government to also examine the competitiveness of the country's tax structure vis-à-vis other countries.

The reduction in personal and corporate income taxes in the United States this year has turned Canada's competitive advantage into a disadvantage for businesses.

"We continue to put pressure on this," said Azzopardi, president of the Association of Auto Parts Manufacturers.

"We are losing other places because the tax structure is not as attractive here."

Schilling said one thing is certain, the status quo in the Canadian auto industry is not an option.

"The lesson here is that what we do does not work," said Schilling. "To see GM go on leave should make us aware of our destination in Canada."

The impact on parts suppliers in London and the surrounding area is expected to be minimal, with few manufacturers supplying Oshawa here in larger quantities.

However, Magna International has three parts plants in St. Thomas and London, Formet, Presstran and Qualtech, which supply GM products. The makers of the Magna were still evaluating the impact.

"We do not comment on any potential impact at the moment. There is still so much moving stuff and nothing is known about it at the moment, "said Tracy Fuerst, Magna's Director of Communications.

In June, Formet celebrated an agreement to supply parts for GM trucks badembled in the United States, the richest deal in its history, which, according to factory officials, would maintain about half of its 1,300 employees.

Steve Rodgers of GS Global Solutions, an automotive consulting firm, says Steve Rodgers, mitigating the impact on suppliers in southwestern Ontario as production at the Oshawa plant declines.

"The volumes are down. I think most suppliers were waiting for that, "he said.

GM said the Impala would not be manufactured after 2019 because of low sales volumes, he said.

"It will not be important for the environment of southwestern Ontario, but it is devastating for Oshawa."

Rodgers was the former director of the Automobile Parts Manufacturers Association and estimates that few regional suppliers supply the Oshawa plant.

"It's getting harder and harder to sell cars," he said.

Jim Wilkes, a Unifor Local 27 officer, representing many parts workers from the city and region, agreed that GM Oshawa was not a significant presence here.

"It came out of nowhere, it was not on our radar. We do not really know what to expect right now, "said Wilkes.

At Cami Assemby's plant in Ingersoll, Unifor officials said a strike of more than four weeks last year could have yielded big dividends.

Workers who bademble the Equinox crossover vehicle have won one of the most difficult speeches in terms of closing factories in the automotive sector, making it more expensive to close the facility. Mike Van Boekel, president of Unifor Local 88, wonders if this saved local jobs.

"It would be very expensive to close the factory now. It's a good insurance. I think it made a difference, "Van Boekel said.

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The union was looking for production guarantees in contract negotiations last year after GM moved production from its Cami Terrain crossover to Mexico, resulting in more than 600 job cuts.

After the strike, the union opted for wording that would require GM to pay $ 290 million in penalties if it closed the plant and forced workers over 21 to move to full board.

"We are in a strong position for the future, but the day is sad for Oshawa workers," said Van Boekel.

– With Postmedia News files

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